ommon stock (having a fair value of $14 per share). As of that date, Bradford had stockholders' equity totaling $105,000. Land shown Bradford's accounting records was undervalued by $10,000. Equipment (with a five-year remaining life) was undervalued by $5,000. A ecret formula developed by Bradford was appraised at $20,000 with an estimated life of 20 years. The following are the separate financial statements for the two companies for the year ending December 31, 2021. There were no intra- ntity payables on that date. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Subsidiary earnings Net income Retained earnings 1/1/21 Allen Company $ (485,000) 160,000 130,000 (66,000) $ (261,000) $ (659.000) Bradford Company $(190,000) 70,000 52,000 -0- $ (68,000) $ (98.000)

ommon stock (having a fair value of $14 per share). As of that date, Bradford had stockholders' equity totaling $105,000. Land shown Bradford's accounting records was undervalued by $10,000. Equipment (with a five-year remaining life) was undervalued by $5,000. A ecret formula developed by Bradford was appraised at $20,000 with an estimated life of 20 years. The following are the separate financial statements for the two companies for the year ending December 31, 2021. There were no intra- ntity payables on that date. Credit balances are indicated by parentheses. Revenues Cost of goods sold Depreciation expense Subsidiary earnings Net income Retained earnings 1/1/21 Allen Company $ (485,000) 160,000 130,000 (66,000) $ (261,000) $ (659.000) Bradford Company $(190,000) 70,000 52,000 -0- $ (68,000) $ (98.000)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Allen Company acquired 100 percent of Bradford Company's voting stock on January 1, 2017, by Issuing 10,000 shares of its $10 par value common stock (having a fair value of $17.50 per share). As of that date, Bradford had stockholders' equity totaling $112,150. Land shown on Bradford's accounting records was undervalued by $19.700. Equipment (with a five-year remaining life) was undervalued by $6,750. A secret formula developed by Bradford was appraised at $36,400 with an estimated life of 20 years. The following are the separate financial statements for the two companies for the year ending December 31, 2021. There were no Intra-entity payables on that date. Credit balances are indicated by parentheses. Allen Company Revenues $ (521,000) Bradford Company $ (303,750) 115,500 54,000 e Cost of goods sold Depreciation expense Subsidiary earnings 172,000 189,000 (131,080) (291,080) Net income $ $ (134,250) Retained earnings, 1/1/21 Net income (above) $ (762,000) (291,080) 175,500 $…
Allen Company acquired 100 percent of Bradford Company’s voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $14 per share). As of that date, Bradford had stockholders’ equity totaling $105,000. Land shown on Bradford’s accounting records was undervalued by $10,000. Equipment (with a five-year remaining life) was undervalued by $5,000. A secret formula developed by Bradford was appraised at $20,000 with an estimated life of 20 years. Following are the separate financial statements for the two companies for the year ending December 31, 2018. There were no intra-entity payables on that date. Credit balances are indicated by parentheses. a. Explain how Allen derived the $66,000 balance in the Subsidiary Earnings account. b. Prepare a worksheet to consolidate the financial information for these two companies
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 9,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a fiveyear remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years.The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenue $(600000) $(230000) Expenses 440000 120000 Investment income not given -0- Dividends declared 80000 50000 The following balances come from the individual accounting records of these two companies as of December 31, 2018: Haynes Turner Revenue $(700000) $(280000)…
Problems 10, 11, and 12 relate to the following:On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc., for $600,000 cash. At January 1, 2016, Sedona’s net assets had a total carrying amount of $420,000. Equipment (eight-year remaining life) was undervalued on Sedona’s financial records by $80,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $20,000 dividend. Sedona recorded net income of $70,000 in 2016 and $80,000 in 2017.Selected account balances from the two companies’ individual records were as follows:On its December 31, 2018, consolidated balance sheet, what amount should Phoenix report for Sedona’s customer list? a. $10,000b. $20,000c. $25,000d. $50,000
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 9,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years.The following balances come from the individual accounting records of these two companies as of December 31, 2017:The following balances come from the individual accounting records of these two companies as of December 31, 2018:a. What balance does Haynes’s Investment in Turner account show on December 31, 2018, when the equity method is applied?b. What is the consolidated net income for the year ending December 31, 2018?c.…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $(600,000) $(230,000) Expenses 440,000 120,000 Investment income Not given –0– Dividends declared 80,000 50,000 The following balances come from the individual accounting records of these two companies as of December…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $(600,000) $(230,000) Expenses 440,000 120,000 Investment income Not given –0– Dividends declared 80,000 50,000 The following balances come from the individual accounting records of these two companies as of December…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $100,000. However, its equipment (with a five-year remaining life) was undervalued by $5,000 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $(600,000) $(230,000) Expenses 440,000 120,000 Investment income Not given –0– Dividends declared 80,000 50,000 The following balances come from the individual accounting records of these two companies as of December…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 11,600 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $133,050. However, its equipment (with a five-year remaining life) was undervalued by $9,550 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $31,400, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $ (614,000 ) $ (298,000 ) Expenses 451,000 174,000 Investment income Not given 0 Dividends declared 80,000 60,000 The following balances come from the individual accounting records of these two companies as of December 31, 2018:…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,700 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $114,800. However, its equipment (with a five-year remaining life) was undervalued by $8,800 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $36,900, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $ (660,000 ) $ (375,000 ) Expenses 450,000 207,000 Investment income Not given 0 Dividends declared 110,000 80,000 The following balances come from the individual accounting records of these two companies as of December 31, 2018:…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 11,200 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $120,200. However, its equipment (with a five-year remaining life) was undervalued by $8,700 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $39,100, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $ (638,000 ) $ (351,000 ) Expenses 465,000 191,000 Investment income Not given 0 Dividends declared 90,000 80,000 The following balances come from the individual accounting records of these two companies as of December 31, 2018: Haynes…
Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 10,700 shares of $10 par value common stock. Haynes’s shares had a $15 per share fair value. On that date, Turner reported a net book value of $114,800. However, its equipment (with a five-year remaining life) was undervalued by $8,800 in the company’s accounting records. Also, Turner had developed a customer list with an assessed value of $36,900, although no value had been recorded on Turner’s books. The customer list had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2017: Haynes Turner Revenues $ (660,000 ) $ (375,000 ) Expenses 450,000 207,000 Investment income Not given 0 Dividends declared 110,000 80,000 The following balances come from the individual accounting records of these two companies as of December 31, 2018:…